The Securities and Futures Commission (SFC) has commenced proceedings in Hong Kong's Market Misconduct Tribunal against AcrossAsia Ltd for failing to disclose highly sensitive inside information as soon as reasonably practicable.

The SFC has also commenced proceedings in the tribunal against Mr Albert Saychuan Cheok, the chairman of AcrossAsia, and Mr Vicente Binalhay Ang, the CEO, for their reckless or negligent conduct that caused the alleged breach by the company of the provisions of the statutory corporate disclosure regime.

This is the SFC's first tribunal case in relation to the disclosure obligations imposed on listed companies under the Securities and Futures Ordinance since they became effective on 1 January 2013.

The SFC’s allegations arise from the litigation in Indonesia between AcrossAsia and its subsidiary, PT First Media. At dispute was the failure of AcrossAsia to repay the money owed to PT First Media. The litigation led to enforcement proceedings by PT First Media against AcrossAsia, including insolvency-related proceedings in Indonesia against AcrossAsia by way of a petition dated 20 December 2012 and a summons dated 28 December 2012. These proceedings sought, among other things, to suspend AcrossAsia’s obligation for payment of debts temporarily to allow a composition plan to be presented to PT First Media and to appoint an Indonesian judge and administrators to manage AcrossAsia’s assets.

The action taken by PT First Media was to recover the principal loan of US$44 million plus interest accrued pursuant to a loan facility agreement entered into between PT First Media and AcrossAsia on 30 June 2011. AcrossAsia failed to repay the loan when it fell due on 30 June 2012.

AcrossAsia’s Hong Kong office received copies of the court documents, which were in Bahasa Indonesian, on 2 January 2013 and their English translations were circulated to Cheok and Ang on 4 January 2013. However, AcrossAsia did not disclose such information to the public until 17 January 2013 after the Indonesian court made these insolvency-related orders against AcrossAsia on 15 January 2013. AcrossAsia sought a suspension of trading on 15 January 2013 and when trading resumed on 22 February 2013, the share price fell by 22.5%.

The SFC alleges that the issue of the insolvency-related proceedings in Indonesia together with their contents were specific information regarding AcrossAsia, highly price-sensitive and not generally known to the public at the crucial time because these proceedings threatened AcrossAsia with loss of control of its major asset, including its stake in PT First Media in Indonesia, and could lead to AcrossAsia being put into liquidation.